Problem 1 (22 pts) Talia has $800,000. Talia formed a portfolio by investing $150,000 in stock A,$200,000 in stock B, $300,000 in stock C and $150,000 in stock D respectively. - The Market Expected return and standard deviation are as per the below: - E(rM)=12% and M=22% - The Risk-Free rate is equal to 3.25% a) What should be the expected return on stock A, and stock C? (4 pts) b) What should be the Beta of security B, and the Beta of security D? (4 pts) c) Calculate the firm specific standard deviation (e,B) for stock B, if stock B standard deviation (B) is equal to 49%, and the firm specific standard deviation (e,D) for stock D, if stock D standard deviation (D) is equal to 66%. (4 pts) d) Calculate the standard deviation (A) for stock A, and the standard deviation (C) for stock C. (4 pts) e) What should be the Beta of Talia's portfolio? ( 2 pts) f) What should be the expected return on Talia's portfolio? ( 2 pts) g) What should be the market risk of Talia's portfolio? (2 pts)